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I was speaking to a colleague today and he commented that the terrorists who tried to send a bomb from the Yemen to a Chicago synagogue were pretty stupid. His view was that any package sent from the Yemen to a synagogue in the US would be suspect – and so the terrorists had to be stupid.

In competitive intelligence it is important not to make assumptions – and assuming that your competitor is stupid is one of the most dangerous assumptions you can make. It is possible that they are stupid. Alternatively, it is also feasible that they see things differently from you – and their viewpoint may be rational and logical from their perspective. Effective competitive intelligence should always involve you trying to see things from the perspective of your competitor rather than from your own, possibly subjective and biased standpoint.

I cannot really understand the rationale of the Yemeni terrorists sending their bomb, presumably intended to blow up en-route, with an address of a synagogue. It does seem stupid – but that is because I am not an Islamist terrorist. However trying to see things from that perspective I could envisage a conversation such as this:

Terrorist 1: So what address shall we use – something that would not be suspicious?”Terrorist 2: How about a synagogue – the Jews control the USA / World so they must get lots of mail. Also they need to print their subversive material so won’t suspect our fake printer cartridges packed with explosives.Terrorist 1: Good idea – which synagogue?Terrorist 2: Obama came from Chicago. Let’s find the synagogue that he would take orders from….

The point is, that even if your enemy IS stupid, they will act based on their own warped rationale. In order to anticipate their actions you need to try and see things as they see them. This is even more important if in fact you are the one who is wrong – as in that case, switching your viewpoint should allow you to spot where your mistakes actually are.

There is a great story that illustrates this point – that what seems crazy may in fact not be. The story is apocryphal – and may be true.

Several years ago, the Pontiac Division of General Motors received a complaint:

This is the second time that I have written to you. I don’t blame
you for not answering my first letter as I must have sounded crazy.
In our family, we have a tradition of having ice cream for desert after
dinner each night. Every night, after we’ve eaten, we vote on which
kind of ice cream to have – and I drive down to our local store to
buy it. I recently purchased a new Pontiac and since then I’ve had a
problem when I go to the ice cream store. Every time I buy vanilla
ice cream and go back to my car it won’t start. If I buy any other
type it starts first time. I realise this sounds insane but it’s true.
Please help me understand what it is that makes my Pontiac fail
to start when I purchase vanilla ice cream and easy to start with
any other type.

The complaints department was naturally skeptical about this letter. However it was obviously written by somebody educated who knew how to write clearly and lucidly. Furthermore the area the writer came from was an affluent area – and a Pontiac is not a cheap car. They decided to take it seriously and an engineer was sent to investigate. The engineer arranged to meet the man just after dinner time – and the two drove to the ice cream store. That night, the vote had been for vanilla ice cream – and just as the man had said, the car wouldn’t start. Bemused, the engineer returned the following night – and the night after that. The car started first time – the votes had been for chocolate on the first night, and strawberry the second night. The fourth night, the choice was again for vanilla – and the car failed to start.

The engineer now realised that there was a problem that needed identification and fixing. He started to log what happened from the moment they arrived at the store – arrival time, time taken to make the purchase, and several other factors. Soon he had a clue – purchases of vanilla ice cream took less time than the other flavours. The reason was that the freezer containing vanilla ice cream was at the front of the store near a quick purchase till, while other flavours were at the back and required lining up to get checked out.

Quickly the engineer realised that this was the answer to the problem – not the ice cream flavour, but the time required. When purchasing vanilla ice cream there was a vapour lock which prevented the car restarting. With the other flavours, there was sufficient time for the engine to cool down, allowing vapour to dissipate and the car to restart.

Of course the moral of the story is that even if something sounds crazy it may not be. Competitive Intelligence analysts should always bear this in mind when they look at a competitor and fail to understand why they are doing something that seems stupid.

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As a competitive intelligence specialist, we try to practice what we preach – and keep an eye on our own competitors. In most cases, we view ourselves as complementers as much as we are also competitors. There is enough work for all of us – and the market is far from saturated.

Part of the task of a Competitive Intelligence consultancy is to show companies that competitive intelligence is a necessary business skill – and that it is legitimate and ethical to outsource competitor research to external consultants whatever can’t be handled in-house. (Reasons for outsourcing include lack of time, lack of skills and experience and the need for an objective view – which can’t be obtained by doing research in-house). In fact AWARE views training in competitive & marketing intelligence as a key element of its business mission, so as to raise CI/MI skills.

There are many ethical competitive intelligence consultants apart from us – in the USA there is Market Analytics, Fuld and Aurorawdc to name three. In Australia – the Mindshifts Group, led by CI industry leader Babette Bensoussan is important. Within Europe there are similar consultancies. We link to a number of top CI consultancies on our alliances web pages.

Unfortunately there are also several companies that fall short ethically and even legally. I recently came across one – with a great domain name, but that’s as far as it goes. This “business intelligence” company (which I won’t name for now, for legal reasons), openly states that they engage in industrial espionage.

Secondary research – their “light touch” is legitimate if it doesn’t employ hacking or password cracking. However their in-depth research placing moles into the target company is highly unethical and probably illegal (depending on the information supplied, and any non-disclosure agreements signed by the agent and their “employer”).

Such behaviour brings all competitive intelligence under suspicion – which is part of the rationale behind this post: to expose such shenanigans.

Fortunately this “business intelligence service” doesn’t come cheap and only very few (probably desperate) companies will avail themselves of such services. In fact the company actually implies this by saying on their web-site:

“We hope that you never need our services, but if you do, then you can be assurred of an excellent service.“

Their charges range from £10,000 for the “light touch” research to £150,000 for their in-depth research (including “employee placement and surveillance“). Even this is not their top price. When looking at individuals, pricing ranges from £25,000 for “light touch” research verifying personal details, employment, connected people, etc. to £200,000 for fully in-depth analysis (lifetime checks, asset checks, lifestyle, etc.). Some assignments are charged at fees of up to £25,000 per day (although most are claimed to be a fraction of this).

To put things into context, we have never charged anything like £10,000 for pure desk research and from conversations with other consultants, they haven’t either.

They claim that their “researchers” come from military, police and government service backgrounds – but they don’t mention any business or marketing background. They seem to be ignoring, or perhaps do not even know the risks involved in industrial espionage and based on what they offer, I’d question whether they’d see the value in standard strategic analysis as a means for understanding competitors. (The US Economic Espionage Act, 1996 is just one risk. Even when companies don’t go to law, there can be serious financial ramifications for espionage).

Instead of looking at public non-confidential intelligence that, when aggregated, can create a detailed picture of all aspects of a company they seem to prefer subterfuge. Such approaches may say what a company is currently planning but it won’t help in understanding what the company is thinking or likely to do in the future

Interestingly this company is not as immune to standard CI investigation as they probably think. Standard secondary research suggests that they use a Plymouth, UK, based front company for finding work placements for their agents, and that their minimalist web-site has at least one hidden / secret directory – which can be found by searching for a robots.txt file.

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I’ve probably said something like this before, but it’s worth saying again.

This was part of a post by Amelia Kassel of MarketingBase – on the AIIP member mailing list.

I recall someone in a workshop I gave about using the Internet for CI about 10 years ago. I introduced the concept of fee-based databases and a young fellow from a business analyst firm raised his hand in front of group of more than 30 participants to stop me from proceeding. He didn’t want to hear or learn about fee-based databases. He had tried them once and they were too hard to use. I asked what he did when couldn’t find information he was looking for on the Internet and he didn’t have an answer but said it didn’t really matter.

I’ve also come across attitudes such as this – why pay for information when you can find it for free. That would be true and valid if the time required to find the information, and the work required to put it into a usable format, was the same. In reality this is rarely the case. The advantage of paying for information from services such as Factiva, Dialog and several other similar services is that you can save a lot of time. The information purchased will be formatted consistently – so it becomes much easier to edit for a report.

Further, relevant information is collected together so there is no need to check hundreds of potential sources. These services index thousands of sources in a way that users of the free services, including Google, can only dream about. As an example, on Factiva, you can specify that search terms appear in the first 50 (or 100 or whatever) words of an article, or within so many words of another term. They support full Boolean searching and wildcard searching far beyond what even the advanced search in Exalead offers.

If that was all such services offered then there could be an argument that with today’s budgetary constraints, good researchers would first focus on the free sources. However many sources held won’t even be available on the free web, as their publishers only make them available on a pay-to-use basis or don’t keep full online archives. This means that unless the researcher has accounts with a multitude of publishers they won’t get the material they need for decision making.

I think part of the secret of being a good researcher is knowing when to use free sources and when to use fee sources. I’m sure that a proportion of the information that is available on pay-to-use sources could be found for free – IF you looked long and hard enough. However employers pay you for your time – and just because something is free doesn’t make it really free if you have had to spend a day finding it when you could have got it within 15 minutes by paying. Then there’s the risk factors of NOT finding something at all!

People who feel it doesn’t matter – that you can justify not paying for information – are actually high-risk employees. They may provide information that allows correct decision making to be made 80% of the time. Unfortunately the Pareto effect comes into play – and that 20% of the time they get it wrong represents 80% of the risk. Decisions made on inadequate data are likely to lead to serious consequences when they are wrong. Saying that you only did a Google search because Factiva cost too much won’t save you or your company in such situations – as it will be too late.

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An article in the New Zealand Herald – Cloak & Dagger Tactics Hit the Office gives an interesting perspective on how dirty tricks, espionage and other unethical practices can hurt companies. Unfortunately there is nothing new in the idea that competitors and others can deliberately aim to hurt rival organizations using unethical and illegal approaches.

Competitive intelligence (CI) is primarily about finding information on your competitive environment – competitors, customers, suppliers as well as general business trends that could impact you. (AWARE‘s brief guide to competitive intelligence tells you more about this).

One common technique is to identify the key intelligence topics (KITs) that you need to focus on to give you that competitive edge. These KITs will are aimed at helping you understand competitor strategies and the reasons competitors are doing what they are doing – as one example.

One topic that all organizations should look at is what others are saying about you.

What do your customers think about your products and services?

What do suppliers think about your negotiating skills – are you a push-over?

How do competitors view your position in the marketplace – and what do they see as your vulnerabilities?

You need to do this globally. Don’t just focus on your key local competitors, but consider those from further afield. New threats could be coming from anywhere: Brazil, India, China…. In fact, CI is a truly global discipline, and it is essential to know thy competitors – wherever they are located.

Sometimes what you’ll discover may be uncomfortable. In 1993, Virgin Atlantic discovered that BA had gained access to confidential files and was using these to poach customers from the airline. This led to a protracted court case – BA lost.

More recently, the Canadian insurer, Fairfax, was the target of a campaign of malicious disinformation from a group of Wall Street Hedge Fund managers. The company is now suing them for $6 billion – claiming that their aim was to manipulate the market by creating uncertainty about the company and its future. These include a variety of dirty tricks – false emails and letters, espionage attempts and more.

The lesson from these two cases (and there are many more) is that it is important to watch out for what others are doing to you. Don’t assume that your competitors always play fair – some don’t.

You need to keep a look out for unethical practices:

the phone call from the “student” asking for help with a school project;

the visit from an “industry analyst” claiming to be writing a stock report

and so on.

Always check that they are who they say they are before confiding anything. If suspicious refuse to give any information away.

Even more important, beware of scams that may try and lull you into a false sense of security: the “official” who claims to be a government tax inspector, who then gives a phone number that you can use to check him up. Except that the people answering the phone are in on the scam! (For any official organizations it should be easy to verify that the phone number is real).

Or the organization using a fake, but official sounding name (e.g. in the UK, many companies are conned into paying more than needed by companies calling themselves things like “Data Protection Office Ltd” which sounds sufficiently similar to the real Data Protection Registrar.)

The old adage Buyer Beware (Caveat Emptor) holds. A key intelligence topic that all companies should include in their armory is the one that focuses on what competitors are doing aimed directly at you – what they are saying, what they thinking, and what they are doing, especially if they have a propensity to play dirty!

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